18 - 3rd Party Drug Plans

Question 1

Why are costs to plans increasing?

Answer 1

• Aging population
• Biologics
• Specialized medications

Question 2

What is a preferred provider network (PPN)?

Answer 2

Agreement between a payer/ employer and a provider/ pharmacy to provide products or services at a lower cost than competitors

Question 3

What is a closed PPN?

Answer 3

Plan members limited to a pharmacy

Question 4

What is an open PPN?

Answer 4

Plan members may go to other pharmacies but may pay a co-pay

Question 5

How are private payers saving money?

Answer 5

• Mandatory generic substitution
• Prior approvals on high cost specialty products
• Capping or reducing fees

Question 6

What are plan sponsors?

Answer 6

• Employers, unions, associations

- Pay the benefits claimed

Question 7

Describe the difference between insurance companies and adjudicators

Answer 7

• Insurance companies (insurers or carriers) -> design and monitor plans; recruit plan sponsors
• Adjudicators -> adjudicate online claims, review formularies and make recommendations; audit claims

Question 8

What do auditors review?

Answer 8

• Unintentional infractions
• • Claims not submitted correctly
• • Claims that don’t meet the agreement requirements
• Intentional infarctions
• • Claims that are fraudulent (product/ services not provided, kickbacks, treating outside scope of practice)

Question 9

Describe pharmacy audits

Answer 9

• Audit programs confirm the integrity and accuracy of the data submitted to the claim
• Auditors ensure that the agreement terms between the pharmacy and the plan are being adhered to
• Adjudicators may manage the plan for another organization (Telus for GWL) or a plan may have their own adjudicator (Green Shield)

Question 10

Reasons for audits

Answer 10

• Claims are submitted improperly
• Claims don’t meet agreement signed between pharmacy and plan
• Claims are submitted fraudulently (intentional deception or misrepresentation)
• • Billing for services not rendered
• • Billing for services outside the scope of practice
• • Accepting “kickbacks” or referral payments
• • Over-treatment

Question 11

Reasons for NIHB audits

Answer 11

• Detect and recover claim irregularities
• Ensure there is a valid prescription order
• Ensure appropriate billing
• • Actual purchase costs of drugs charged
• • Drug mark-ups are based on provincial or territorial schedules
• • U and C fee not exceeded

Question 12

What triggers audits?

Answer 12

• Higher than average fees and drug costs
• Charging cost differences to px
• Unusual quantities/ short days supply
• Unlikely therapies (for age, gender, odd combinations)
• Forcing adjudication
• Frequent “no-sub” prescriptions
• Using more than one override code/ frequent overriding of response codes
• Multiple over-ride attempts
• Compounding ingredients/ costs for compounding
• Inappropriate days supply for chronic medications

Question 13

Importance of preventing audits

Answer 13

• Financial risk to the business
• Operational costs
• • Preparation for the audit costs employee time
• • Employee costs during the audit
• Reputation of the business (word gets around of the audit/ “clawbacks”)
• May have electronic billing privileges rescinded if major issues occur

Question 14

Reasons for “claw-backs”

Answer 14

• Verbal refill authorizations/ verbal prescriptions not documented clearly
• Failure to be able to produce documentation
• No evidence of physician authorization/ no authorized repeats
• Early refills/ unauthorized vacation supplies
• Not an eligible benefit
• Quantity supplied greater than what was authorized
• No proof of prescriber indicating “no-sub”
• Prescription not dated
• Excessive time charges on compounds
• Ingredient price overcharge on compounds

Question 15

Describe ways to prevent “claw-backs” with compliance packaging

Answer 15

• Must document who requested the compliance packaging
• Actual days supply must be indicated on the prescription along w/ specific directions from the physician
• Proof of authorization from the prescriber indicated frequency of filling must be indicated on the prescription

Question 16

Types of audits

Answer 16

• Next day/online desk audits -> may request a copy of prescriptions and hard copies to be faxed for verification the next day
• Written desk audits -> documentation is requested and reviewed (typically for compounds)
• Comprehensive on-site audits
• • Date and time arranged for on-site visit (3 week’s notice)
• • List of about 25-50% of prescriptions to be audited requested prior to the visit
• Physician verifications
• Member verifications -> prescription receipts and claim information may be confirmed w/ the plan members

Question 17

What documentation is required for an audit?

Answer 17

• Pharmacy records required = original prescriptions, computer hard copies, vendor/wholesale invoices, evidence of additional coverage
• Documentation to verify = early refills, vacation supplies, changes to original quantities, professional judgement